MALIK B JAVERI, MUMBAI V. ITO 20(2)(2), MUMBAI

ITA 1577/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79249 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 10-06-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 06-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAMBIT MISHRA
• Assessee Lawyers: S S AGARWAL
• Keywords: Unexplained cash credit; Depreciation; Corroborative evidences
• Section: 143(3); 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 1577/MUM/2012 ASSESSMENT YEAR: 2007-08 MALIK B. JAVERI, SHOP NO. 1, SUBHAM CENTRE, C. G. ROAD, CHAKALA, ANDHERI (E), MUMBAI- 400 093 VS. ITO 20(2)(2) 6 TH FLOOR, PERAMAL CHAMBERS, LAL BAG, MUMBAI (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :- AABPJ 7047 H APPELLANT BY : SHRI S.S. AGARWAL RESPONDENT BY : SHRI SAMBIT MISHRA DATE OF HEARING : 10.06.2014 DATE OF PRONOUNCEMENT : 25.06.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD.CIT(A)-31, MUMBAI DATED 04.01.2012 FOR THE ASSES SMENT YEAR 2007-08. 2. IN GROUND NO. 1, THE ASSESSEE HAS AGITATED THE D ECISION OF THE LD. CIT(A) CONFIRMING THE ADDITIONS OF RS.13,37,885/- AND RS.7 ,89,006/- MADE BY THE AO TREATING THE SAME AS UNEXPLAINED CASH CREDIT. 2.1 BRIEFLY STATED, THE ASSESSEE, AN INDIVIDUAL, WH ILE DECLARING A TOTAL INCOME OF RS.6,30,519/- HAD SHOWN UNSECURED LOANS OF RS.69,67 ,849/-. AS THE ASSESEE HAD FAILED TO COMPLY WITH THE NOTICES ISSUED DURING THE ASSESSMENT PROCEEDINGS, THE AO COMPLETED THE ASSESSMENT U/S 144 READ WITH SECTION 143(3) OF THE ACT AND THEREBY ADDED THE ENTIRE AMOUNT OF THE UNSECURED LOANS U/S 68 OF THE ACT AS UNEXPLAINED CASH CREDITS. ON APPEAL, THE LD. CIT(A), AFTER OBTA INING THE REMAND REPORT FROM THE AO, HAD CONFIRMED THE ADDITIONS OF RS.13,37,885/- A ND RS.7,89,006/- ON ACCOUNT OF THE UNSECURED LOANS CLAIMED BY THE ASSESSEE IN RELA TION TO CENTURION BANK AND IDBI ITA NO. 1577/MUM/2012 MALIK B. JAVERI ASSESSMENT YEAR: 2007-08 2 BAND RESPECTIVELY. AGGRIEVED BY THE IMPUGNED ADDITI ONS, THE ASSESSEE HAS RAISED THIS GROUND IN THE APPEAL BEFORE US. 2.2 HAVING HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD, IT IS PERTINENT TO MENTION THAT THE ASSESSEE HAS 3 LOAN A CCOUNTS IN THE CENTURION BANK AND THE TOTAL AMOUNT OUTSTANDING IN THE THREE ACCOU NTS AT THE END OF THE PREVIOUS YEAR RELEVANT TO THE AY IS RS.13,37,885/-. THE PERU SAL OF THE RELEVANT LOAN ACCOUNTS INDICATES THAT THE ASSESSEE HAS BEEN PERIODICALLY P AYING THE INSTALLMENTS TOWARDS THE PRINCIPAL AND INTEREST. SIMILARLY, IN THE LOAN ACCO UNT OF THE IDBI BANK, AS ON 31.03.2001, THE AMOUNT OF LOAN OUTSTANDING IN THE N AME OF THE ASSESSEE IS 7,89,006/-. WHEN THE FACTS BEING SO, THE LD. CIT(A ) IS OF THE VIEW THAT THE ASSESSEE HAS FAILED TO FURNISH ANY DOCUMENTARY EVIDENCES EXP LAINING THE SOURCES OF ALLEGED LOANS AND THEREBY CONFIRMED THE ADDITION. THE RELEV ANT DETAILS OF THE BANK ACCOUNTS AVAILABLE AT PAGE NOS. 46-50 OF THE PAPER BOOK CLEA RLY INDICATE THAT THE ASSESSEE HAS TAKEN GENUINE LOANS FROM THE BANK AND IS STILL SHOW N AS OUTSTANDING IN ITS BOOKS OF ACCOUNT. THEREFORE, WE ARE OF THE CONSIDERED VIEW T HAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE IMPUGNED ADDITIONS MADE BY THE AO AND THUS THE SAME STAND DELETED. RESULTANTLY, GROUND NO. 1 IS ALLOWED. 3. IN GROUND NO. 2, THE ASSESSEE HAS AGITATED THE A CTION OF THE LD. CIT (A) IN CONFIRMING THE DISALLOWANCES OF RS.60,133/-, RS.876 2/- AND RS.1,01,882/- ON ACCOUNT OF OTHER EXPENSES, TELEPHONE EXPENSES AND O UT OF DEPRECIATION RESPECTIVELY. THE ASSESSEE HAD CLAIMED THE OTHER EXPENSES, TELEPH ONE EXPENSES AND DEPRECIATION ON FIXED ASSETS AMOUNTING TO RS.3,00,666/-, RS,43,8 11/- AND RS.5,09,408/- RESPECTIVELY. 3.1 AS REGARDS THE CLAIM OF OTHER EXPENSES OF RS.3, 00,666/-, THE ASSESSEE HAS FAILED TO FURNISH THE DETAILS IN SUPPORT OF THE EXP ENSES DURING THE ASSESSMENT PROCEEDINGS AND THE AO, THEREFORE, MADE AN ADHOC DI SALLOWANCE OF 20% OF THE EXPENSES WHICH WORKED TO RS.60,133/-. EVEN DURING T HE FIRST APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A) ALSO, THE ASSESSEE HAS NOT SU BMITTED DUE AND PROPER EVIDENCES IN SUPPORT OF THE CLAIM OF EXPENSES. ITA NO. 1577/MUM/2012 MALIK B. JAVERI ASSESSMENT YEAR: 2007-08 3 3.1.1 REGARDING THE DISALLOWANCE OF RS.8762/- BEING 20% OF THE CLAIM ON TELEPHONE EXPENSES, THE LD. CIT(A) CONFIRMED THE SAID DISALLO WANCE AS PERSONAL INVOLVEMENT CANNOT BE RULED OUT. ALSO, IN THE CLAIM OF THE EXPE NSES, THE ASSESSEE INCLUDED A SUM OF RS.14,586/- PAID TO M/S. MATCOMM FOR THE PURCHAS E OF MOBILE HANDSETS AND THE SAME IS TREATED AS CAPITAL IN NATURE AND ACCORDINGL Y THE LD.CIT(A) DIRECTED THE AO TO ALLOW DEPRECIATION ON THE SAID AMOUNT WHILE CONFIRM ING 20% OF THE DISALLOWANCE ON THE REMAINING AMOUNT. 3.1.2 APROPOS, THE DISALLOWANCE OF AN AMOUNT OF RS. 1,01,882/- BEING 20% OF THE CLAIM OF DEPRECIATION ON FIXED ASSETS OF RS.5,09,40 9/-, THE SAID DISALLOWANCE HAS BEEN CONFIRMED BY THE LD. CIT(A) AS THE ASSESSEE HA S FAILED TO PROVIDE THE DETAILS FOR THE ALLEGED ADDITION OF RS.14,17,236/- TO THE F IXED ASSETS DURING THE YEAR UNDER CONSIDERATION. 3.2 CONSIDERING THE FACT THAT THE ASSESSEE HAS FAIL ED TO FURNISH THE DETAILS OR PROPER SUPPORTING EVIDENCES EXPLAINING HIS CLAIM OF EXPENSES, WE DO NOT FIND ANY JUSTIFIABLE REASON TO INTERFERE WITH THE DECISION O F THE LD. CIT(A) AND THUS THE SAME IS UPHELD. RESULTANTLY, GROUND NO. 2 IS DISMISSED. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF JUNE 2014. //SD// // SD// (SANJAY ARORA) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 25.06.2014. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR B BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.